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Master Builders SA
October 2018
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Federal Court fines CFMMEU for threatening to “smash” subcontractor’s jobs and orders advertisement of contraventions
Federal Court fines CFMMEU for threatening to “smash” subcontractor’s jobs and orders advertisement of contraventions
ABCC v CFMEU (The BKH Contractors Case) (No 2) [2018] FCA 1563
The Federal Court has fined the CFMMEU and seven of its officers a total of $313,000 for their unlawful conduct at Sydney construction sites in 2014 and 2015, and ordered for it to publicly advertise the outcome.

A portion of the penalties handed down related to the CFMMEU’s coercion of a group of concreting subcontractors to make an enterprise agreement with the union. In its earlier decision, the court found that during a meeting with the group, a CFMMEU official handed out a proposed enterprise agreement and said “if you don’t sign the new EBA we will pick one of you and smash your jobs”. The Assistant Secretary of the union then sent a text message to a contractor who had attended the meeting saying “eenie meenie miney mo”. The court found that the text was sent “as a threat and a threat intended to reinforce the threat made earlier in the day”.

The Court also found that CFMMEU officials had contravened right of entry laws on multiple occasions including by entering without permits, arranging blockades, obstructing workers and “acting in an improper manner”. On one occasion a union official had entered a site to investigate an alleged safety concern, however the Court found the official had no genuine concern as to safety and entered the site for the purpose of stopping a concrete pour and disrupting work.

Despite over $1.1m in penalties imposed on the CFMMEU in less than four months since the start of the financial year, the Court commented that CFMMEU has the financial resources to treat the penalties as an “acceptable cost of doing business”.  Significantly in this case, the Court ordered that the CFMMEU publish an advertisement of the contraventions and the penalties, despite the conduct occurring four years ago. The Court stated that “at the very least, advertisements may cause individual union members to pause before pursuing unlawful conduct.”

ABC Commissioner Stephen McBurney welcomed the decision to impose an advertisement order and said that ““Every dollar the CFMMEU pays in fines comes out of the pockets of their members. It is time for the CFMMEU to respect the rule of law and the rights of all building industry participants.”

The case highlights the threatening tactics used by the CFMMEU to pressure builders and sub-contractors to enter into union enterprise agreements. Industry participants who are subjected to conduct of this kind should notify the Master Builders SA IR Team, and/or the ABCC. 
Unfair dismissal? Representation for members
Unfair dismissal? Representation for members
The Master Builders SA IR Team can represent your business in relation to employee claims including unfair dismissal, general protections and underpayment of wages. We have extensive experience with these matters and can provide pragmatic, commercial advice to minimise the cost to your business, and represent you at conciliation conferences and hearings. Contact us today on 8211 7466 to find out more.
Amendments to Building and Construction General On-Site Award 2010 and other construction awards
4 yearly review of modern awards – Construction Awards [2018] FWCFB 6019

The Fair Work Commission (FWC) has published its decision on the four yearly review of the ‘construction awards’, comprised of the Building and Construction General On-Site Award 2010 (On-Site Award), the Joinery and Building Trades Award 2010 ‘(Joinery Award), the Mobile Crane Hiring Award 2010 and the Plumbing and Fire Sprinklers Award 2010.

The decision relates to substantive claims from employer groups, including Master Builders Australia (MBA), and unions to vary the Awards. The key claims made by MBA were to vary the On-Site and Joinery Awards to improve the payment of wages, shiftwork and RDO provisions and to simplify the complex provisions for allowances.

An important outcome of the review decision is the proposed change to the On-Site Award to amend and simplify the ‘fares and travel patterns allowance’, which was described by the FWC as “unnecessarily complex and confusing”. Significantly, the amendment proposes to exclude payment of the fares allowance in circumstances where an employee is supplied with a fully maintained vehicle, and where the employee starts and finishes work at a depot or yard of the employer rather than on-site. The FWC confirmed that the current drafting, under which the fares allowance is payable in these circumstances, does not achieve the modern awards objective and should be amended accordingly.

The FWC accepted MBA’s argument that a model time off in lieu of overtime clause should be included in the On-Site and Joinery Awards, as well as the submission for an additional category of shiftwork to address a gap in the On-Site Award. The FWC rejected claims made by the CFMMEU to significantly expand and increase the living away from home allowance in the On-Site Award., but unfortunately rejected the claim by employer groups to include junior rates of pay in the On-Site Award.

The majority of amendments are expected to take effect from 1 December 2018, while other amendments will be subject to further submissions of the parties.
Members legal advice service
Members legal advice service
Master Builders SA is pleased to offer members a free face-to-face initial legal advice service for construction law matters. This service is provided by experts from leading South Australian construction law firm Fenwick Elliott Grace.

Members can seek advice in respect of a number of issues including contracts, disputes, industry specific matters, tenders and security of payment.

This service is available on the first Monday of each month at Master Builder SA, Level 1, 47 South Terrace Adelaide.

Contact the Industrial Relations Team on 8211 7466 to book your 20 minute session.
Quarterly Information Seminar - 2 November
Event Details
Date Friday 2 November 2018
Time 8.30am to 10:30am
Venue Master Builders SA - 47 South Terrace, Adelaide
Cost FREE for members/$20 for non-members


In the seminar, our experts will discuss the following topics:

Proposed Changes to the Development Approval Process
- Presented by Chris Wiltshire

Court Ruling on Casual Employee Contracts
- Presented by Sam Condon

Health and Safety Alert on Silicosis
- Presented by Shelley Rowett

Credit Management
- Presented by Kevin Tiggemann

For further information, contact Christopher Wiltshire on 08 8211 7466 or at
Model casual conversion clause added to modern awards
4 yearly review of modern awards – Part-time employment and Casual employment [2018] FWCFB 4695

The Fair Work Commission has updated 84 modern awards to include a model casual conversion clause, effective from 1 October 2018.  The updated awards include the Clerks Award 2010, the Gardening and Landscaping Services Award 2010 and the Horticulture Award 2010.

The decision does not impact on the construction industry modern awards with existing casual conversion clauses, including the Building and Construction General On-Site Award 2010, the Joinery and Building Trades Award 2010, the Mobile Crane Hiring Award 2010 and the Plumbing and Fire Sprinklers Award 2010. The casual conversion clauses in these awards are not affected by the decision and remain unchanged.

Casual conversion provides regular casual employees with the right to request that their employer covert their employment to full time or part time. Under the model clause, a ‘regular casual employee’ is an employee who, in the preceding 12 months, has worked a pattern of hours on an ongoing basis, which they could continue to perform as a full time or part time employee, without significant adjustment.

An employer can refuse an employee’s request to convert, provided that they have consulted with the employee and provided ‘reasonable grounds’ for the refusal in writing.  Under the model clause, ‘reasonable grounds’ include that the employee is not truly a regular casual, or it is known or reasonably foreseeable that the employee’s position will cease to exist (or their hours will significantly reduce), within the next 12 months.

Where an Award with a model conversion clause applies, employers are obligated to provide a copy of the clause to all casual employees within the first 12 months of their employment, regardless of whether they meet the definition of ‘regular casual employee’. For existing casuals, employers are required to provide a copy of the clause by 1 January 2019. If an employer refuses a conversion request and if the employee challenges this, then the dispute resolution provision in the applicable Award will apply.

In light of the model conversion clause and the recent full Federal Court decision where a casual worker was found to be permanent with an entitlement to annual leave, it is important for employers to continually review their engagements of casual employees. Employers should comply with their obligations to notify eligible employees of their right to request to convert to permanent employment, and consider and respond to any request by a casual employee to convert.

FREE IR evaluation
FREE IR evaluation
Master Builders SA offers free industrial and workplace relations evaluations to members to assist your business to comply with continually changing and complex workplace laws. Contact us today on 8211 7466 to arrange a comprehensive review of your business' employment practices.
Levy Rate Reduced for Portable Long Service Leave
The Construction Industry Long Service Leave Board has announced to Master Builders a reduction in the fund levy rate from 2.15% to 2.00% effective from 01 January 2019.

This is the second levy rate reduction since July 2016, when the rate reduced from 2.25% to 2.15%.

The new levy rate will apply from the first return period in 2019, commencing from 01 January 2019.

The Board attributes the reduction to prudent management of the fund, along with recent strong investment returns.

For further information or advice, please contact the IR team on 8211 7466.
Enterprise Agreements
It is important for businesses to ensure that they are covered by enterprise agreements that are current. If you don't have a current enterprise agreement in place, contact the Industrial Relations Team on 8211 7466. We can assist with preparing new agreements and reviewing and updating existing agreements.
Commission rejects enterprise agreement not adequately explained to employees
Downer EDI Mining - Blasting Services Pty Ltd [2018] FWCA 2888

The Fair Work Commission (FWC) has denied approval of a new enterprise agreement for a large mining company after finding the agreement was not genuinely agreed to for the purpose of the Fair Work Act 2009, despite a unanimous vote and employee testimony that they were “fully aware” of the terms in the agreement.

The proposed agreement covered four reasonably long term employees, each of which were also self-appointed bargaining representatives. On multiple occasions, the Company explained the agreement to the four employees “clause by clause”. One of the four employees testified that the terms of the new agreement were “black and white to us” and he was “fully aware of what we were voting on”.

In the statutory declaration in support for approval of the agreement, the Company declared that the terms of the agreement were explained to the employees and there were no terms less beneficial than under the Award. However, following objection to the approval from the CFMMEU, the FWC identified 22 clauses in the agreement that were less beneficial than the Award and found the Company failed to identify and explain these terms to employees before the vote. Critically in this case, the Company had explained the new agreement with reference to the predecessor enterprise agreement only and without any reference or comparison to the terms in the applicable Modern Award.

The company argued that its explanation was reasonable in the circumstances where the employees had an intimate working knowledge of the existing agreement and little to no knowledge of the Award. The FWC disagreed, finding that as the company was a “sophisticated industrial player” with experience and resources, it was reasonable to expect it to take steps to identify and explain the less beneficial terms to the employees.

The FWC noted that the Award is the applicable reference instrument for the purpose of the better off overall test, rather than any existing enterprise agreement. The FWC found that new employees may have been worse off under the agreement, as the wages in the agreement would not be sufficient to “buy out” the less favourable terms to the Award. As a result of the less beneficial terms not being declared or explained to employees, the FWC could not be satisfied the agreement had been genuinely agreed to and the approval application was dismissed.

This case highlights the increasing scrutiny by the FWC of enterprise agreements, not only in relation to the better off overall test, but also the specific way in which the terms of an agreement are explained to employees. Employers should take all necessary steps to ensure that employees understand the terms of a proposed enterprise agreement before it is voted on, particularly in relation to any terms that are less favourable or different than the applicable Award. 
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